Explanation
Section 80IC was introduced to incentivise investment in hilly and North-Eastern states. Eligible states and union territories include Himachal Pradesh, Uttarakhand, Sikkim, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. The undertaking must be located in a notified industrial area or growth centre within these states and must have commenced production before the sunset date prescribed for each state. The deduction rate is 100% for the first 5 consecutive assessment years and 25% (30% for companies) for the next 5 years, in a block of 10 years. The total block of years cannot exceed the period until the prescribed sunset date. The undertaking must be a new venture — no reconstruction, splitting, or transfer of used assets beyond 20%. Businesses include manufacturing of any article or thing and certain service sector activities. Only available under the old tax regime. Given the sunset dates for most states have passed, §80IC is now primarily relevant for existing units completing their 10-year claim period. Any new industrial investment should explore newer incentive schemes announced by the respective state governments. Verify on the income-tax portal before filing.